Goldman Sachs Sees 2012-13 Global Cocoa Shortage of 100,000 Tons

Global cocoa consumption will exceed output in the season that started in October after two years of oversupply, according to Goldman Sachs Group Inc.

The cocoa market will face a “modest” shortage of about 100,000 metric tons in 2012-13, Damien Courvalin, an analyst at the bank in New York, said in a report dated yesterday. Output was 90,000 tons higher than demand in the 2011-12 season after a record surplus of 341,000 tons a year earlier, according to the International Cocoa Organization in London.

“We expect the global cocoa market to be in a modest deficit of roughly 100,000 tons for the 2012-13 season that began in October on the back of a rebound in global bean processing and stable production,” Courvalin said.

There is potential for the smaller of two annual crops, the so-called mid crops, to be better than expected in West Africa, curbing the forecast shortage, he said. The mid crop usually starts in April in Ivory Coast, the world’s largest cocoa grower.

The price of cocoa, which climbed 6 percent last year, has “limited upside” partly because of historically high stockpiles at the beginning of the marketing year and money managers’ above-average bets on higher futures prices, he said.

Cocoa traded on ICE Futures U.S. in New York will be at $2,300 a ton in three months, $2,400 a ton in six months and $2,500 a ton in 12 months, the bank forecast. The commodity for March delivery fell 0.3 percent to $2,250 a ton by 4:27 a.m. in New York.

Arabica Coffee

The arabica coffee market may have a “modest” shortage or be balanced in 2013-14 because of a large crop in Brazil, the world’s largest producer, even as trees there enter the lower-yielding half of a two-year cycle, according to the report. Arabica coffee prices traded on ICE fell 37 percent last year, making the beans the worst performing commodity in the Standard & Poor’s GSCI gauge of 24 raw materials.

“We see limited further downside to prices and expect coffee prices to remain rangebound near-term before recovering modestly in 2013,” Courvalin said.

Arabica coffee will be at $1.55 a pound in three months, $1.65 cents a pound in six months and $1.75 a pound in 12 months, the bank forecast. The beans for March delivery rose 0.7 percent to $1.544 a pound.

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